Key Highlights:
1. inFoods® IBS Real-World Data: Nearly 60% of Irritable Bowel Syndrome ("IBS") Patients Achieved Clinically Meaningful Pain Reduction and 68% Achieved Bloating Reduction with inFoods® IBS
During the third quarter, Biomerica reported real-world data showing:
59.4% of patients achieved ≥30% reduction in abdominal pain
68.1% achieved ≥30% reduction in bloating, using the FDA-recognized responder endpoint consistent with Biomerica's peer-reviewed randomized controlled trial
These real-world findings build on a peer-reviewed, randomized controlled clinical trial published in Gastroenterology, conducted across five major academic centers including Mayo Clinic, Cleveland Clinic, and the University of Michigan, and Houston Methodist Hospital. That pivotal study demonstrated significantly greater abdominal pain relief in the treatment arm versus the sham diet arm (59.6% vs. 42.1%, p = 0.02).
2. CMS Establishes National Medicare Payment Rate for inFoods® IBS Test
The Centers for Medicare & Medicaid Services (CMS) established a national Medicare payment rate of $300 for inFoods® IBS, effective January 1, 2026. This milestone provides reimbursement clarity and represents an important step toward expanding patient access to inFoods® IBS through the Medicare system. Biomerica and its lab partner are working with the appropriate Medicare Administrative Contractor to attain Medicare coverage for inFoods® IBS.
3. European Revenue Up 45% in the Quarter; hp+detect™ Receives UK Regulatory Registration
Revenue from European customers grew 45% year-over-year in the third quarter, increasing from $198,000 to $287,000. Biomerica believes this growth reflects building commercial momentum on the continent.
Subsequent to quarter end, Biomerica further strengthened its European position on two fronts:
UK MHRA Registration: hp+detect™ received registration from the UK Medicines and Healthcare products Regulatory Agency, providing the regulatory foundation for commercial sales in the United Kingdom.
First Commercial European Lab Order: Biomerica received its first commercial order for hp+detect™ from one of the largest clinical laboratory chains operating across Europe. This strategic account's scale and geographic reach positions it as a reference account and potential gateway to broader European Union laboratory channel adoption, with recurring orders expected as hp+detect™ is integrated into routine testing workflows.
H. pylori affects an estimated 45% of the population across Europe's five largest countries. The World Health Organization designates H. pylori as a Class 1 carcinogen and lists it among the 16 antibiotic-resistant bacteria posing the greatest threat to human health globally.
4. R&D Expenses Reduced 24% Year-to-Date, Reflecting Transition from Development to Commercialization
Research and development ("R&D") expenses decreased 24% year-to-date, from $771,000 to $583,000, as both the hp+detect™ development project and the inFoods® IBS clinical program have completed development phases. This reflects disciplined capital allocation as Biomerica directs resources toward commercial execution rather than further development spend.
5. Over-the-Counter Product Line Delivers 16% Revenue Growth
Over-the-counter revenue grew 16% year-over-year in the third quarter reflecting consumer demand growth and continued diversification of Biomerica's revenue mix.
Management Commentary
Zack Irani, CEO said, " This quarter reflects the cost of doing something harder than maintaining the status quo. We are restructuring Biomerica around higher-margin, diagnostically-driven products and a growing Contract Development and Manufacturing Organization ("CDMO") services business, and near-term revenue reflects that transition. The underlying indicators are encouraging: post-quarter CDMO customer demand has improved and inFoods® IBS and hp+detect™ represent genuine commercial catalysts. The fixed cost base is established. We expect margin expansion to follow as these initiatives contribute revenue."
Third Quarter and Year-to-Date Fiscal 2026 Financial Results
Net SalesNet sales for the third quarter of fiscal 2026 were approximately $987,000, compared to $1.12 million in the prior year quarter. The decrease primarily reflects lower contract manufacturing revenue following the completion of prior customer projects, as well as normal variability in the timing of project-based activity. These impacts were partially offset by growth in inFoods® IBS sales and a 16% increase in over-the-counter product lines.
For the nine months ended February 28, 2026, net sales were $3.58 million, compared to $4.56 million in the prior year period. The decrease primarily reflects lower contract manufacturing revenue following the completion of a prior R&D project, as well as the absence of large initial distributor stocking orders in the Middle East and North Africa ("MENA") region recorded in the prior year. These impacts were partially offset by continued growth in inFoods® IBS sales.
Gross MarginFor the nine months ended February 28, 2026, gross margin was approximately 13%, compared to 15% in the prior year period. The decrease primarily reflects changes in product mix and lower overall sales volume during the current period. Management expects gross margins to improve over time as inFoods® IBS and hp+detect™ sales continue to scale, along with the development of additional Contract Development and Manufacturing Organization ("CDMO") revenue opportunities.
Operating ExpensesOperating expenses for the third quarter of fiscal 2026 were $1.25 million, compared to $1.23 million in the same period last year. For the nine ...
